Customer perks: Don’t leave bank loyalty rewards on the table

When shopping for a mortgage, car loan or other banking product, it might be tempting to simply take the first good deal you see, regardless of who’s offering it. But don’t forget to check with the bank where you have checking or savings accounts. Your relationship with the institution may yield savings or other perks you may not have known about.

Most big banks, for instance, offer lower loan rates to existing customers. At Wells Fargo, customers who have a previous relationship with the bank and sign up for automatic payments can receive discounts on car loans, student loans and personal lines of credit, says Wells Fargo bank spokesman Jason Vasquez.

Auto loan discounts for bank account holders

Bank

Interest rate discount (in %)

Requirements

Bank: Bank of America

Interest rate discount (in %): 0.25 – 0.5

Requirements: Top discount available with a 3-month bank account average balance of at least $100,000.

Bank: BBVA Compass

Interest rate discount (in %): 1

Requirements: Must authorize automatic payments.

Bank: JPMorgan Chase

Interest rate discount (in %): 0.25 – 0.5

Requirements: Earn the lesser discount when you decline automatic payment.

Bank: U.S. Bank

Interest rate discount (in %): 0.5

Requirements: Must authorize automatic payments.

Bank: Wells Fargo

Interest rate discount (in %): 0.25

Requirements: Must authorize automatic payments.

Source: Bank websites

But discounts on banking products are just one of the perks customers could receive.

An inclusive club

“Banking loyalty programs, in general, are becoming more prevalent and less exclusive,” says Roland Bloesch, global director of financial services at hybris and SAP Customer Engagement and Commerce, a business software company. “These programs mostly focus on offering customers points for using credit cards, maintaining a minimum account balance or trading a certain number of stocks during a time period. They also typically allow customers to earn points that they can later redeem for a range of goods and services, ranging from items such as airline tickets to vacuums.”

Why your bank offers rewards

Banks have been criticized in recent years for charging high fees and paying little interest. But financial institutions also have been dishing out loyalty perks — and they know customers have come to expect them.

A January 2015 Preferred Rewards Consumer Study from Bank of America found that 6 in 10 consumers want rewards just for completing typical banking activities.

“We specifically heard from our clients that they want rewards that recognize their everyday banking and investing actions, including daily spending, as well as activities they consider more responsible investment behaviors, such as investing for retirement,” says Aron Levine, head of preferred banking and investments at Bank of America.

Bank of America created its Preferred Rewards program “to thank our clients for deepening their relationships with us,” but also to offer perks for “responsible” banking behaviors, Levine says.

Customers with qualifying balances across all accounts receive rewards like:

Free withdrawals from foreign ATMs.

No-fee checking accounts.

Free equity trades.

A way to get more business

Not only do banks want to show customers their appreciation, they also want to encourage customers to do even more business with them.

“When customers get the most out of their banking relationship, it makes their lives more convenient,” says Ryan Bailey, head of retail deposit products at TD Bank. Here, checking customers receive special rates on savings accounts and discounts on mortgages, home equity lines of credit and unsecured loans. “Easy access to multiple accounts in one place is very important to today’s on-the-go consumer.”

Pass along the savings

In some cases, banks offer loyalty rewards to customers as a way of passing along the savings achieved through customers’ actions. For instance, Kasasa checking accounts, available at select community banks and credit unions, offer unique rewards to consumers who receive e-statements instead of paper ones, access online banking and use debit cards a certain number of times each month.

“Those activities save the bank or credit union money, which is passed along to the consumer in the form of these rewards,” says Gabe Krajicek, CEO of BancVue, the creator of Kasasa rewards checking accounts.

Loyalty rewards to look for

While loyalty rewards offered by many banks and credit unions take the form of discounts, some institutions offer points systems, in which loyal customers can cash in their points for prizes.

For instance, Kasasa checking accounts offer cash back or digital downloads from iTunes, Google Play or Amazon. “The most popular rewards we see are higher earned interest rates and cash back,” Krajicek says. “Kasasa accounts have paid consumers $156 million in rewards so far.”

Still, just because your bank is prepared to offer you a discount on your next loan doesn’t mean it’s the best offer. It could pay to shop around for a car loan before taking your bank’s deal.

“Customers should always look for the best overall value, including rates and loyalty programs,” Bailey says. “They should also make sure their bank’s product offerings and services are convenient for them, such as proximity to a branch or ATM where they live, or online and mobile capabilities that suit their banking needs.”

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